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RECRUIT TALENT IN TODAY’S MARKET

Employee Engagement Playbook

2 | Employee Retention Playbook

Copyright © 2008–2017, Glassdoor, Inc. “Glassdoor” and logo are proprietary trademarks of Glassdoor, Inc.

INTRODUCTION

In order to better understand what factors contribute to whether an employee changes jobs, Glassdoor Economic Research analyzed more than 5,000 job transitions listed on resumes shared anonymously on Glassdoor.

In this eBook, we’ll share the most significant factors that contribute to whether an employee stays or leaves and what you can do about it.



SECTION 1

The Cost of Losing Employees



SECTION 1: The Cost of Losing Employees

Employee retention is now more important than ever. Throughout 2016 into early 2017,

unemployment remained at its lowest rate since 2008.1 When unemployment rates

are low, voluntary quit rates are high: U.S. Bureau of Labor Statistics data shows that

quit rates are inversely proportional to unemployment rates.2

Source: 1 U.S. Bureau of Labor Statistics, Monthly Unemployment Rate; 2 U.S. Bureau of Labor Statistics, Monthly Quits; 3 Center for American Progress, 2012

Jan

-07

Jun

-07

Nov

-07

Ap

r-0

8

Sep

-08

Feb

-09

Jul-

09

Dec

-09

May

-10

Oct

-10

Mar

-11

Au

g-1

1

Jan

-12

Jun

-12

Nov

-12

Ap

r-1

3

Sep

-13

Feb

-14

Jul-

14

Dec

-14

May

-15

Oct

-15

Mar

-16

Au

g-1

6

Quits

Une

mpl

oym

ent

2.6

2.2

1.8

1.4

1

10

7.5

5

2.5

0

Unemployment vs. Quits

Quits Unemployment

MONETARY COSTS Recruiting replacement employees is an

expensive proposition: the direct costs of hiring

include recruiting costs and training costs.

One study estimates that it costs businesses an average of 21% of an employee’s annual salary to replace a lost worker.3

https://data.bls.gov/timeseries/LNS14000000

https://data.bls.gov/timeseries/JTS00000000QUR

https://www.americanprogress.org/issues/economy/reports/2012/11/16/44464/there-are-significant-business-costs-to-replacing-employees/



SECTION 1: The Cost of Losing Employees

ORGANIZATIONAL COSTS

The loss of organizational knowledge, including systems

knowledge and team, client and vendor relationships, is also

a blow to companies that’s significant but not easily measured.

Having to do the work of others and adjust to new personalities

can lower engagement and morale for existing employees.

It takes an average of 52 days to fill an open position, up from 48 days in 2011.1

That’s almost two months of lost productivity — not to mention all the time it takes for

a new employee to get up to speed. In addition to the time crunch on productivity for the

position itself, coworkers lose productivity by spending time conducting interviews and

training the new employee.

TIME COSTS Not only is recruiting and training expensive,

a true accounting of replacement costs includes

time, which means lost productivity.

Source: 1 Bersin by Deloitte, Talent Acquisition Factbook 2015, April 2015



SECTION 2

Factors That Matter for Retention



Average Glassdoor Ratings (External Movers Only)1

ORIGINAL JOB

NEW JOB

Overall Rating

Career Opportunities Rating

Compensation and Benefits Rating

Culture and Values Rating

Work-Life Balance Rating

Senior Management Rating

*Statistically significant. Source: 1 Glassdoor Economic Research, “Why Do Workers Quit? The Factors That Predict Employee Turnover” February 2017

Employees Are More Likely to Stay in a Positive CultureCompanies that invest in culture will have a better chance of attracting new employees,

and they’ll also have a better chance of retaining them.

SECTION 2: Factors That Matter for Retention

1. Company CultureAccording to Glassdoor research, when workers change jobs, it’s usually for a company with

a better culture. In all six measures of company culture on Glassdoor, average ratings were higher

for the new employers where employees took jobs, and were lower for their original employers.

A one-star improvement in a company’s Glassdoor rating raises the odds that a typical employee will stay for their next role by 4%.1

A company’s Career Opportunities rating, along with its Culture & Values rating, is an even stronger predictor of employee retention, with a 1-star improvement increasing retention by 5%.1

Impact of 1-Star Ratings Increase on the Probability an Employee Will Stay1

0%

1%

2%

3%

4%

5%

6%

Overall Employer

Rating

4%*5%* 5%*

Career Opportunities

Rating

Culture and Values

Rating

Pro

bab

ility

Em

plo

yee

Will

Sta

y

https://www.glassdoor.com/research/studies/why-do-workers-quit/




What You Can Do to Create a Better Culture:

Define your mission and values.

Connect each value to behaviors.

Consistently reinforce values in communications and in team meetings.

Engage leadership in promoting culture and values.

Invest in employee engagement programs.

Include feedback from employees in decision making.

Conduct surveys and focus groups to identify what’s working and what

needs improvement.

Publicly commit to a feedback implementation timeline.

Engage employees on Glassdoor to capture more feedback.

• Affirm that information gathered in reviews will be used to improve the

company culture and/or processes.

• Share positive reviews at team meetings to reinforce company culture.

ACTION TIPS

RECRUIT STRATEGICALLY: Look for star employees from companies with slightly lower Glassdoor ratings than yours.

You’ll have an easier time selling them on the winning points of your company’s unique culture.




2. Employee DevelopmentA great culture is the first important key to retaining employees, and companies that include

employee development as part of their culture will be even more likely to hold on to their

talent. Workers should not always have to change companies to change roles, but that’s the

case for the majority of people in our study.

Role changes are almost three times more

likely to occur by changing employers rather

than being promoted from within:

73% of workers left their employer to change roles, while only 27% stayed

at the same employer.1

STAYED AT EMPLOYER

LEFT EMPLOYER

When Changing Roles, Most Employees Leave Their Employer

Source: 1 Glassdoor Economic Research, “Why Do Workers Quit? The Factors That Predict Employee Turnover”, February 2017

Avoid Job StagnationStaying in one role for too long can be defined as job stagnation,

and workers who stagnate in jobs for too long are more likely

leave. In our sample of resume data, employees changed jobs

on average every 15 months, ranging from less than a month

to more than seven years in the same job.1

On average, stagnating in a given role for an additional

10 months is associated with a 1% higher chance that the

typical employee will leave the company for their next job —

a statistically significant impact.1

73.1%

26.9%




How to Invest in Employee Development:

Clearly define opportunities for promotion or job transfer.

Focus on empowering employees during the first year and a half of employment.

Train managers to discuss development options and establish achievable stretch goals for employees.

Empower employees with training and development options such as:

Encourage and share stories of career development within the organization.

Encourage passion projects, employee-led interest groups, and/or volunteer projects.

Remind employees of the opportunity to write Glassdoor reviews at work anniversaries or upon promotion.

• When an employee writes a new review, the previous review from that employee disappears.

Candidates receive information about how your company promotes from within if the employee has

been promoted since the last review.

• Position review writing as a way to share feedback about the culture, as well as provide information

to future employees.

To learn more, download the Enterprise Employee Engagement Playbook or

the Employee Engagement Playbook for Small and Midsize Businesses.ACTION TIP

RECRUIT STRATEGICALLY: Common recruiting wisdom is correct — employees who have been in the same

job for at least two years may be ripe to consider a new opportunity.

Pinpoint candidates who are hungry to take on additional responsibilities.

Internal training

External training

Conference attendance

Emotional intelligence training1 2 3 4

http://resources.glassdoor.com/enterprise-employee-engagement-playbook.html?channel=website

http://resources.glassdoor.com/ebook-smb-employee-engagement-playbook.html?channel=website




3. CompensationCompensation matters for employees just as much as culture and opportunities for development.

Changing companies shouldn’t be the only way workers can get a raise, yet it often is.

Average Base Pay for Original vs. New Jobs1

Source: 1 Glassdoor Economic Research, “Why Do Workers Quit? The Factors That Predict Employee Turnover”, February 2017

ORIGINAL JOB

NEW JOB

Average Base Pay

63% of job moves in the Glassdoor study resulted in the same or higher pay for workers. By contrast, 37% of job moves resulted in lower pay for workers.1

Workers who changed jobs earned an average pay raise of

$2,724 | 5.2%

SAME OR HIGHER PAY

LOWER PAY

63%37%

$60,000

$55,000

$50,000

$45,000

$40,000

$35,000

$30,000

$52,260$54,984




Pay Motivates Employees to StayDon’t underestimate the power of frequent

pay raises, bonuses and equity offerings in your

retention strategy. Happy, productive workers

appreciate increased pay as a reward.

Source: 1 Glassdoor Economic Research, “Why Do Workers Quit? The Factors That Predict Employee Turnover” February 2017; 2 Glassdoor Economic Research, May 2016

Benefits can also be a retention magnet, especially in an age of rising healthcare costs and

increasingly generous PTO and paid leave policies. By focusing on competitive pay and the

benefits that matter most as part of your total compensation package, you’ll be well equipped

to retain satisfied employees.

On average, a 10% higher base pay is associated with a 1.5% higher chance that a worker will stay at the company for their next role — a statistically significant effect.1

Out of a list of 54 benefits, these three basic benefits — health insurance, vacation/PTO and retirement planning options like 401(k)s and pensions —

showed the highest correlation with employee satisfaction.2

https://www.glassdoor.com/research/studies/benefits-drive-employee-satisfaction/



How to Keep Compensation and Benefits Up to Date:

Include salary, equity and bonus opportunities in career advancement discussions.

Evaluate and define your company salary philosophy.

Review salary data and benefits programs at least once per year.

Consider free/low cost benefits that contribute to your culture, such as:

• Wellness programs (meditation, yoga, sports groups, gym discounts)

• Volunteer Time Off (VTO)

• Employee interest groups

• Financial education


• Include market factors, pay scale positioning and equity

positioning in your analysis.

• Read our eBook, Glassdoor’s Guide to Salary Conversations.

ACTION TIPS

RECRUIT STRATEGICALLY: Given the importance of culture and opportunities, the job description and your company’s

culture may be more appealing to the candidate than the potential for a pay increase. But

don’t forget to emphasize benefits and bonus or equity opportunities when talking to candidates.

http://resources.glassdoor.com/ebook-glassdoors-guide-to-salary-transparency.html?channel=website




4. Industry NormsHow long your employees stay is influenced by what industry your company is in, which

partly reflects the nature of work. For example, most construction work is seasonal, and

workers routinely change jobs and employers after each project is completed. By contrast,

public sector roles tend to be famously stable, with workers staying in jobs for longer

periods of time.

Average Time Spent in Roles Varies Widely by Industry1

Source: 1 Glassdoor Economic Research, “Why Do Workers Quit? The Factors That Predict Employee Turnover” February 2017

The industry with the most frequent job changes is the construction, repair and maintenance industry. Employees in that sector change jobs every 10.6 months on average. By contrast, the industry where employees spend the most time in

jobs is Government, where workers spend 18.6 months on average in each role.1

Months



How to Adjust for Retention Expectations in Your Industry:

Ensure managers discuss promotion and raise opportunities annually

at minimum to account for this 10–18 month average time in roles.

Conduct competitive research on the culture, career development and

compensation strategies for employment competitors in other industries.


• Research Glassdoor ratings and profiles of your competitors and

Glassdoor Best Places To Work to find the secrets of high-rated companies.

• Read our eBook, Stealing Your Competitor’s Playbook:

How to Win the Competition for Talent.

ACTION TIPS

RECRUIT STRATEGICALLY: Consider cross-pollinating with workers from other industries

for roles that are not necessarily industry-specific, such as

accounting or software engineering. For instance, workers

from industries with typically long tenure stretches may be

more likely to stay loyal if your industry’s average tenure is on

the shorter side. On the other hand, workers from industries

that have shorter average tenure may appreciate the stability

of a company with typically long tenure stretches.

http://resources.glassdoor.com/stealing-your-competitors-playbook-ebook.html?channel=website

http://resources.glassdoor.com/stealing-your-competitors-playbook-ebook.html?channel=website



Given the high costs of losing trusted

employees, it’s worth making the

necessary investments to retain them.

By focusing on the proven factors of

company culture, employee development,

and compensation while keeping industry

norms in mind, you’ll be well on your way

to improving your retention rate and

recruiting more employees who stay. In

addition, using Glassdoor as a feedback

and candidate communication tool will

allow you to promote a positive culture

that focuses on employee development

and rewards them appropriately.

SUMMARY

About Glassdoor

With millions of company reviews, salary reports, interview reviews and benefits

reviews on more than 700,0001 companies worldwide, Glassdoor is a trusted and

transparent place for today’s candidates to search for jobs and research companies.

Glassdoor helps employers across all industries and sizes advertise their jobs and

promote their employer brands to a well-researched, highly selective candidate

pool. By advertising jobs via mobile devices, email alerts and throughout Glassdoor,

employers influence candidates at the moment they’re searching jobs and making

decisions. This results in more-informed candidates that require 50% fewer

resumes to find a quality hire at a fraction of the cost of traditional job boards.2

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To get involved in the conversation on Glassdoor and start managing and promoting your employer brand,

email [email protected], call (415) 339-9105 or visit www.glassdoor.com/employers.

For the latest in recruitment marketing tips, best practices and case studies, follow us on Twitter: @GDforEmployers.

Sources: 1Glassdoor Internal Data, March 2017; 2As measured by application-to-hire ratio compared to other job sites based on a study of 2015 hiring data for 30 million applications

There is simply no better way to jumpstart your employee engagement campaign

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platform for transparent communication along with metrics that help you assess

where your efforts are best channeled for maximum return on your employee

satisfaction and commitment, which ultimately feeds your company’s bottom line.

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